US election result promises less volatile regime for GCs

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November’s US presidential election has resulted in Joe Biden becoming president-elect, a change in regime with significant implications. Margaret Taylor analyses what the new administration will mean for general counsel in particular.

Votes are still being counted and the incumbent is refusing to concede, but with all the main television networks calling the US election result on 7 November, it seems clear that Joe Biden will in January become the 46th President of the United States.

After a turbulent four years under President Donald Trump, whose late-night Twitter posts have repeatedly led to confusion in the political and corporate worlds, the prospect of a less volatile regime has been taken as a positive by those operating in the business sphere.

‘The first change is one that is all-encompassing and that is that it will bring more certainty to the markets,’ says Darci Bailey, Corporate Counsel Forum Liaison Officer on the IBA North American Regional Forum.

‘The toughest thing to navigate over the past four years has been the uncertainty and unpredictability,’ adds Bailey. ‘Whether on trade policy, whether on immigration, you name it and you never knew what was going to come next. That’s the first and broadest impact that the new presidency will have.’

For those working in the media industry in particular, the prospect of a new administration taking over in January is expected to bring a degree of relief. Right from the start of his tenure, President Trump made repeated accusations of bias on the part of what he termed ‘the mainstream media’. His tweets about ‘fake news’ and the ‘lying’ press contributed to widespread public hostility against news organisations.

Jonathan Anschell, General Counsel at ViacomCBS Media Networks, says this made covering the 2020 election particularly difficult, especially as journalists were also having to work ‘within the ground rules of Covid-19’.

‘We’re trying to adapt as best we can,’ he says. ‘Our duty is to report the news as we see it and be respectful to both sides [but] we’re dealing with an environment where the media has been called out as an enemy of the people. That can have an inciting effect.’

The absence of that inciting voice is expected to eliminate some of the extra measures those organisations have had to take to ensure their staff have been kept safe, easing some of the burden that has been placed on them as employers.

Edie Hofmeister, Website Officer on the IBA Corporate Counsel Forum, says employers more generally will be given ‘added relief’ once Biden is inaugurated as the President-Elect has vowed to introduce measures that will help unemployed workers and small businesses ‘survive the Covid challenge’.

At the same time, employers are expecting that a relaxation of President Trump’s tough immigration policies will make it easier for them to fill vacancies with foreign workers.

Steve Crown is Corporate Counsel Forum Liaison Officer on the IBA Media Law Committee and Deputy General Counsel at Microsoft Corporation. He believes more relaxed immigration policies will be vital to help the economy recover in the wake of the coronavirus pandemic.

Noting that ‘immigration is a really important matter to us’, Crown adds that ‘the talent that is available across the globe helps us build better products and helps the economy flourish’.

At a broader level, the Biden presidency is expected to see a return to a more stringent and more strictly enforced regulatory regime after President Trump took an axe to numerous laws that had been a mark of the Obama era.

Ana Dutra, Chief Compliance Officer at Itaú Private Bank, notes that while under the Obama administration ‘there was very heavy regulation of the financial industry’, under President Trump several of those regulations were relaxed.

Notably, the Dodd–Frank Wall Street Reform and Consumer Protection Act, which overhauled financial regulation in the wake of the 2008 financial crash; the Foreign Account Tax Compliance Act, passed with the aim of preventing American companies moving offshore to avoid US taxes; and the Volcker Rule, which prevents banks from making the kind of investments that contributed to the 2008 crash, all came within President Trump’s sights.  

Dutra says that while it was anticipated that a second Trump term would have brought further relaxation of the rules, more stringent regulations are now anticipated under President Biden. Hofmeister says this will necessarily lead to an added workload for in-house legal teams, whose responsibility it will be to ensure their employers are compliant.

‘Biden’s economic plan specifically calls on corporations to meet certain governance standards that they aren’t being required to meet now,’ Hofmeister explains. ‘This may increase corporate legal liability when it comes to employees and communities that in-house counsel will have to manage.’

Hofmeister predicts that corporate transparency requirements will increase, adding additional disclosure obligations that in-house counsel will have to address.

For Bailey, though, not every reversal of a Trump policy will lead to extra work for in-house lawyers, with some of the incumbent’s decrees going unheeded by the industries they had an impact on.

Indeed, while Hofmeister notes that Biden’s commitment to make the environment ‘a priority item’ could result in legislation ‘that will force businesses to account for and reduce their carbon footprints’, Bailey says the reality is that many have been doing that anyway. This is despite President Trump last year serving notice that the US would quit the Paris Climate Agreement.

‘Across all the regulatory regimes in the US there hasn’t been as much enforcement and that has had an interesting effect,’ she says.

Bailey points to the automotive industry, where, during his tenure, President Trump introduced corporate tax cuts that impacted on the industry and repealed Obama-era fuel-economy rules. ‘But the industry has chosen not to roll them all back, for example on green issues,’ she explains.

‘They are doing sustainability work and environmental work and it’s been interesting to see that in the absence of enforcement and the absence of governmental control market forces have taken over,’ adds Bailey.